MassVentures has conducted research with the goal to gain a broad perspective on the state of the funding market for early stage technology companies in Massachusetts – what’s working well, what are the gaps, and how has it changed since we last conducted this research in 2011.

1. 2013
INNOVATION
ECONOMY
SURVEY

2. Situa7on
Summary
•
Nearly
300
entrepreneurs,
venture
capitalists,
service
providers,
angel
investors
and
other
members
of
the
innova7on
economy
par7cipated
in
the
survey
in
May
of
2013
– Goal
was
to
gain
a
broad
perspec7ve
on
the
state
of
the
funding
market
for
early
stage
technology
companies
in
MA
–
what’s
working
well,
what
are
the
gaps,
and
how
has
it
changed
since
2011?
•
The
following
slides
and
charts
summarize
the
results
and
highlight
key
themes
and
opinions

3. Survey
respondents
by
profession
(298)
Experienced
entrepreneur
(95)
7%
Service
provider
(31)
12%
46%
8%
12%
15%
Aspiring
entrepreneur
(26)
Venture
capitalist
(16)
Angel
investor
(15)
Other
(26)
Other
=
trade,
government,
universi7es

4. MassVentures
con7nues
to
bring
addi7onal
capital,
credibility
and
resources
to
its
entrepreneurs
70
percent
60
50
40
30
20
10
0
196
respondents

5. 70
The
Gap
Remains
Primarily
$1-­‐$3M…
But
the
Series
A
Round
is
Becoming
More
Challenging
60
50
40
%
2011
30
2013
20
10
0
$0-­‐$500K
$500k-­‐$1M
$1M
-­‐
$3M
$3M
to
$5M
$5M
to
$10M
Respondents
could
select
more
than
one
category

6. Other
gaps
do
exist
for
early
stage
companies
80
Percent
2011
2013
40
0
Yes
-­‐
Funding
for
1st
7me
entrepreneurs
Yes
-­‐
Funding
for
underserved
industries
Yes
-­‐
Funding
for
underserved
MA
regions
Other
No

7. Most
agree
that
the
State
should
play
a
role
in
iden7fying
in-­‐state
opps,
developing
a
talent
pool
and
par7cipa7ng
in
VC
financings
100%
80%
Not
Appropriate
60%
Appropriate
40%
Very
Appropriate
20%
0%
Inden7fying
Help
source
VC
financings
Underserved
Underserved
Angel
in-­‐state
or
develop
a
industries
regions
financings
revenue
opps
talent
pool
University
spin-­‐outs

8. 67%
raised
follow-­‐on
funding
in
<12
months
7%
24%
3-­‐6
months
27%
6-­‐12
months
12-­‐24
months
2+
years
43%
151
responses

9. ..and
most
found
the
process
efficient
although
many
are
s7ll
looking
for
a
beher
understanding
and
a
consistent
process
for
naviga7ng
it.
•
•
•
•
•
•
•
A
beher
understanding
of
the
universe
of
MA
angels/VCs,
their
market
or
stage
focus
and
capacity
to
invest
More
opportuni7es
to
bring
investors
and
emerging
companies
together,
more
frequent
venture
fairs,
Seed
capital
for
early
stage
companies
from
angel
groups
is
a
inherently
inefficient
due
to
the
consensus
nature
of
the
decision
making
process.
Standardized
terms.
For
most,
dealing
with
terms
is
not
their
forte.
Access
to
Angel
investors,
and
the
process
to
get
in
their
agenda.
There
is
no
one
consistent
vehicle
that
can
allow
investors
to
get
in
front
of
the
investors,
every
investor
has
their
"own"
criteria
and
not
adver7sed
or
shared.
A
single
point
contact
within
the
State
that
could
direct
companies
to
funding
sources
would
help.
When
do
we
go
to
Mass
Ventures,
Mass
Life
Science
Center,
MA
Angels,
etc?
Angel
Groups
are
too
slow.
VC's
do
their
own
thing...and
most
companies
are
not
VC
appropriate.

10. On
a
scale
from
1-­‐4,
4
being
very
well,
people
ranked
how
well
the
Innova7on
Economy
is
doing
in
MA
as
a
2.8
and
success
should
be
measured
by
the
following..
35.0
30.0
Percent
25.0
20.0
15.0
10.0
5.0
0.0
#
of
MA
jobs
#
of
co.'s
Investment
Major
tech
Visiility
on
#
of
#
of
IPOs
created
started
in
returns
co.'s
the
na7onal
acquisi7ons
MA
hdqrtrd
in
level
MA

11. Is
it
true
that
entrepreneurs
are
leaving
MA
for
more
welcoming
environments?
35.0
30.0
Percent
25.0
20.0
15.0
10.0
5.0
0.0
No,
not
at
all
A
small
amount
At
an
expected
Yes,
more
than
but
blown
out
of
level
should
be
propor7on
Yes,
they're
leaving
in
droves!

12. 46%
of
respondents
think
entrepreneurs
are
leaving
the
state
more
than
they
should
be.
Why?
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Most
likely
reason
Possible
reasons
Not
likely

13. Where
is
it
easiest
to
raise
money?
6%
7%
2%
California
10%
New
York
MA
75%
Other
Texas

14. Most
found
their
mentorship
to
be
very
helpful
with
the
most
effec7ve
mentorship
coming
from
their
own
networks
and
colleagues
percent
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Poor
Not
very
helpful
Helpful
Very
helpful
Extremely
helpful

15. How
do
you
see
the
investment
climate
changing
in
the
State?
45.0
40.0
Percent
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Gesng
worse
Same
but
Roughly
the
shiting
priori7es
same
Beher
Much
beher

16. Funding
for
Healthcare
IT
con7nues
to
thrive,
Mobile
has
improved
but
Consumer
is
s7ll
lacking
25%
20%
15%
10%
5%
0%
Improving
Lacking

17. Compared
to
2
years
ago,
less
jobs
are
going
overseas
but
more
are
leaving
MA
for
other
states
30.0
Percent
25.0
20.0
15.0
10.0
5.0
0.0
More
jobs
Less
jobs
going
overseas
-­‐
overseas
more
staying
No
shit
More
jobs
Less
jobs
leaving
MA
leaving
MA
for
other
for
other
states
states
No
shit
Dispersed
equally
between
China
and
India
and
a
smaller
%
to
Eastern
Europe

18. Summary
• MassVentures
is
s7ll
servicing
the
capital
gap
of
$0-­‐$3M
• Funding
for
1st
7me
entrepreneurs
and
underserved
markets
is
s7ll
a
challenge
• Most
believe
the
State’s
innova7on
economy
is
doing
beher
than
average
• 54%
of
respondents
believe
the
exodus
of
entrepreneurs
is
overstated.
For
those
that
are
leaving,
they
are
primarily
headed
to
California
and
New
York
for
access
to
capital.